Police in India are investigating allegations that the father of Slumdog Millionaire star Rubina Ali attempted to sell her for £200,000 to a trio of undercover British reporters. Ali's father, Rafiq Qureshi, admits meeting the journalists but denies the allegation.

According to the story in the Sunday tabloid News of the World, Qureshi claimed that his impoverished family "got nothing" from their association with Slumdog Millionaire. Danny Boyle's Mumbai-set fable won eight Oscars at February's Academy Awards and has earned more than $300m (£206m) at the global box office. While nine-year-old Ali still lives with her father and stepmother in the city's slums, she is the beneficiary of a trust fund set up by the film's producers.

Posing as the representatives of a wealthy Middle Eastern sheikh, the reporters met three times with Qureshi between Thursday and Saturday last week. "I have to consider what's best for me, my family and my daughter's future," the paper quotes him as saying. It claims that Qureshi agreed to sell his daughter after first haggling over the price. "The child is special now," he is alleged to have said. "This is an Oscar child."

While admitting that the money was "a great temptation", Qureshi dismissed the allegation that he was prepared to sell his daughter. Speaking to the BBC, he criticised the tactics of the reporters. "They played dirty with us, but we didn't accept any money from them," he said. "My daughter is not for sale."

In Slumdog Millionaire, Ali plays the role of the heroine – Latika – as a young girl. After attending the Oscar ceremony in Los Angeles, Ali and her co-stars received a rapturous reception on their return to Mumbai. Last week, while her father was meeting the undercover journalists, Ali was reportedly shooting a soft drinks commercial alongside Nicole Kidman.